Singapore Inflation Rate, 2012

The Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) have reported full year 2012 headline inflation at 4.6%, a dip from 2011’s 5.2%. Core inflation, which excludes accommodation and private road transport costs, was 2.5%, up slightly from 2011’s 2.2%.

MAS and the MTI forecast 2013 headline inflation to be between 3.5 and 4.5%, driven by higher accommodation costs and transport costs. Core inflation is forecasted to be around 2 to 3%, as higher wage costs are expected to be passed on to consumers in the form of price increases.

Employers planning for their annual wage adjustments should take these indicators into consideration. Any increment less than the inflation rate will mean a reduction of real wages. However, this needs to be balanced with the overall economic outlook for 2013. In an increasingly unpredictable and weak economy, companies should consider introducing more flexible remuneration structures.